It seems like there is a bit of a hole in Wordpress 2.5, and a big one if you consider uploading images important. If you want the quick solution just skip till you hit the list.

So why would they change it? The new unloader boast with a uploader progress bar, more image resizing settings, multiple file upload (!) and it all comes together and forms a Gallery feature. I have not explored it in depth but it should be pretty cool if you have a need for it. It also supports audio and video. Now that a whole lot of eggs in one basket!

Unfortunately due to the early release of Wordpress 2.5 there is major issues with the uploader. I personally got a error “An error occurred in the upload. Please try again later” and for friends it just plain did not want to work with the all fixes installed. Here is a quick “How to Fix my Wordpress 2.5 Image uploader” list summerized.

• If you have no time to waist, this plugin will we be for you. No-Flash-Uploader

Now actually try solve the problem:

• Re-upload you files for WP 2.5 ( Very common issue)
• mod_security might be causing problems. Just add this to your .htaccess file in the root of your site and reupload it. This Fixed the uploader for me!
  

  <IfModule mod_security.c>
SecFilterEngine Off
SecFilterScanPOST Off
</IfModule>

  That will disable it for the entire wp-admin directory. It’s possible to be more specific about it, this is just a quick and easy test to see if mod_security is causing your issues.

• Exception to #1: Call to undefined function: ctype_digit(). Download and upload this file: link-template.php

• Clear your browser cache, restart your browser twice. Also clear /wp-content/uploads/js_cache directory on your site.

• Update your Flash version (Esp. Linux)

• IE has specific known issues. Download these two files, replace them in your WordPress installation: IE-Fix

• No buttons? Plugin with Javascript and/or jQuery can cause the issue. Disable your plugins and see if the buttons appear. Upgrade you plugins and try seek out the one causing the error.

• The highly popular Bad Behavior plugin breaks the uploader. Upgrade it to 2.0.14: http://www.bad-behavior.ioerror.us/2008/04/07/bad-behavior-2014/

If none of the above worked for you then there are some furthur reading:

• http://wordpress.org/tags/upload
• http://wordpress.org/support/topic/164999 (source of this post)